Egypt is serious about reforms

A senior member of the Egyptian cabinet hasstressed that his country's priority is its stability, especially as it takes steps towardeconomic growth, and remains "serious about reforms" in what he called "the new Egypt." In remarks delivered at the Middle East Institute during his trip here for theWorld Bank spring meetings, Egypt's newly-appointed Minister of Planning andInternational Cooperation, Ashraf El-Araby, outlined four challenges facing hisgovernment: security, inclusivity, restoration of confidence, and the promotion ofhigh growth rates."Historically, we had several visions, tens of strategies, but none of those strategieswere agreed upon," he said, adding that Egypt needs "to have a comprehensive andinclusive vision" in order to move forward economically. El-Araby noted that "overall, we are on the right track," but said Egyptians must feellike they have "real ownership" of the strategy adopted by the government.To achieve this, he explained, both the private sector andNon-GovernmentalOrganizations (NGOs) have been invited to take the lead in the development of anational strategy to carry Egypt to the year 2030.El-Araby then pointed to "fiscal sustainability" - something he called "the magic term" - as the means to restore confidence in the economy."We are not going to talk with the IMF (International Monetary Fund) about a newloan during this transition period," he said. "We see it better left for the incoming government," starting with presidential elections in late May of this year.However "with or without the IMF agreement, we need to take serious action to dealwith these structural challenges," he continued.As the country aims for high growth rates, El-Araby said the government is "workingon trying to review all the investment laws" for petroleum, electricity andconstruction among other areas."We injected two stimulus packages representing three percent of GDP," heexplained, resulting in around USD nine billion to create jobs, as well as industrialzones in the country. But when it comes to employment, young people face the greatest challenges.According to El-Araby, 15.4 percent of the population is out of work, with themajority being the youth. "We need to create decent jobs in the formal sector," hesaid."In the last three years, the growth rate in Egypt was two percent annually, equal orless than the population growth rate," he added. "The per capita income did notchange at all over the last three years," since the start of the uprising that toppledthe former regime.In comparison, El-Araby noted that even during the global economic crisis in 2008,the Egyptian growth rate remained at seven percent.For now, the government has already begun working on reforms to both thetaxation system as well as the subsidization of energy in order to produce revenue.El-Araby insisted, however, that there's much more to be done."We need to establish a solid social safety net," he said, by creating a unifieddatabase for subsidies, and then later for conditional cash handouts to assist thepoor and lift them out of the "vicious cycle" of poverty.There is a "need to also restore the balance between population and naturalresources," said El-Araby. To that aim, he cited "population redistribution," as wellas allocating 10 percent of the GDP to education, health, and scientific research.But while many of these plans are worked out, transparency will also be a priority in"the new Egypt." El-Araby laughed as he asked, "How to introduce the termaccountability to Egyptian society?"